FAISALABAD, April 5: Business activities on the local cotton yarn market remained thin for the last couple of days due to absence of buyers and escalating prices of polyester fibre forcing the major wholesale dealers to stay away. suspend business activities.
According to a survey conducted by Dawn on Thursday, an abnormal increase of Rs8 per kg of polyester fibre was witnessed during a short span of a fortnight which was an unprecedented for the last many years.
It was also observed that due to escalation in the prices of fibre, the rates of the polyester cotton have also witnessed an increase of 25 to 50 paisa per pound, while the PV and PP yarn remained available at previous rates.
Similarly, no active sale and purchase of the cotton yarn was noticed due to unclear situation and speculative business by some of the dealers.
The business activities of cotton yarn, polyester yarn, polyester fibre and almost all brand and qualities were also at standstill due to speculative business forcing the genuine buyers and sellers to stop their transactions.
The survey also revealed that despite making all out efforts by the big dealers of cloth and yarn merchants, trading in Asia’s biggest cotton yarn market remained low. Dealers were seen sitting idle due to low turn out of buyers especially from other parts of the province.
Commenting on the extra ordinary increase in the fibre rates, some exporters expressed their reservations claiming that “it was unfortunate that owners of fibre manufacturing units always played game with their buyers by dictating their prices due to monopoly in the market due to imposition of certain restrictions on the import of cheap rated fibre in the country.
They said that federal government was providing “certain incentives” in shape of reducing markup rate in banking sector and refunding of the sales tax etc., to the exporters for getting maximum orders for exports, but the monopolists reacting sharply and enhancing prices of fibre resulting in serious crisis in the market and creating problems for the exporters.
They complained that negative steps of the owners of fibre units was not only harmful for the exporters and others traders but also a clear violation of establishing modern era of globalization and norms of the international trade.
They demanded the federal government to announce some package of incentives for the exporters, cloth merchants and owners of cottage industries so that they could run their business with peace of mind.
Meanwhile, the prices of grey cloth, “Latha” and “Khasha” have also registered an increase of 50 paisa to Re 1 per metre. However, the cloth market circles claimed that the sale and purchase of all type of quality of cloths were dull for the last one week and potential buyers are not coming up in the market for the last two weeks due to which the wholesalers, commission agents and supplier of cloth were sustaining huge losses.
The cloth market insiders told Dawn that majority of cloth dealers purchased cloth from the manufacturers both by powerlooms and other organized units for “due payment” for which they charged extra interest at the rate of 2 to 3 per cent per month against the total amount.
Similarly, these dealers sold the cloth to exporters and other buyers on due payment basis.
